BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2275
                                                                  Page  1

          CONCURRENCE IN SENATE AMENDMENTS
          AB 2275 (Hayashi)
          As Amended August 17, 2010
          Majority vote
           
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          |ASSEMBLY:  |     |(May 10, 2010)  |SENATE: |33-0 |(August 18,    |
          |           |     |                |        |     |2010)          |
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                    (vote not relevant)

          Original Committee Reference:    B.P. & C.P.  

           SUMMARY  :  Prohibits contracts issued, amended, or renewed on or  
          after January 1, 2011, between a health care service plan, a  
          specialized health care service plan, or an insurer, and a dentist  
          from requiring a dentist to accept a payment amount set by the  
          plan or insurer for dental care services provided to an enrollee  
          or insured that are not covered under the contract.  Prohibits a  
          provider from charging more for non-covered dental services than  
          his or her usual and customary rate for those services.
          
           The Senate amendments  delete the Assembly approved version of this  
          bill and instead:

          1)Prohibit a full service or specialized health plan or insurer,  
            with respect to plan contracts and policies issued, amended, or  
            renewed on or after January 1, 2011, that cover dental services,  
            from requiring a dentist to accept an amount set by the plan or  
            insurer as payment for non-covered dental care services provided  
            to an enrollee or insured.

          2)Prohibit providers from charging more for non-covered dental  
            services under a plan contract or insurance policy than their  
            usual and customary rate for those services. 

          3)Requires the evidence of coverage (EOC) and disclosure form, or  
            combined EOC and disclosure form, with respect to plan contracts  
            and policies issued, amended, or renewed on or after July 1,  
            2011, that cover dental services, to include the following  
            statements:

             a)   If a patient opts to receive non-covered dental services,  
               a participating dental provider may charge his or her usual  
               and customary rate for those services;








                                                                  AB 2275
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             b)   Prior to providing a patient with dental services that are  
               not a covered benefit, the dentist should provide to the  
               patient a treatment plan that includes each anticipated  
               service to be provided and the estimated cost of each  
               service;  

             c)   If the patient would like more information about dental  
               coverage options, the patient may call member services at  
               [insert appropriate telephone number], or his or her  
               insurance broker; and,

             d)   To fully understand his or her coverage, the patient may  
               wish to carefully review this EOC document.

          4)Define "covered services" to mean dental care services for which  
            the plan or insurer is obligated to pay pursuant to an  
            enrollee's plan contract or insured's policy or for which the  
            plan or insurer would be obligated to pay pursuant to an  
            enrollee's plan contract or insured's policy but for the  
            application of contractual limitations, such as deductibles,  
            copayments, coinsurance, waiting periods, annual or lifetime  
            maximums, frequency limitations, or alternative benefit  
            payments.

           EXISTING LAW  :

          1)Provides for the regulation of health plans and insurers by the  
            Department of Managed Health Care (DMHC) and the California  
            Department of Insurance (CDI), respectively. 

          2)Requires contracts between plans or insurers and providers to be  
            fair and reasonable.

          3)Requires plans and insurers to reimburse a claim for covered  
            services within a specified period of time of receiving the  
            claim.

           AS PASSED BY THE ASSEMBLY  , this bill required annual state  
          property inventory reports by the Department of General Services  
          to be completed and updated by January 1 of each year.

           FISCAL EFFECT  :  According to the Senate Appropriations Committee,  
          costs to CDI would be minor and absorbable and costs to DMHC would  
          continue to be about $60,000 - $70,000 in fiscal year 2010-2011,  
          but would likely be minor ongoing.  








                                                                  AB 2275
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           COMMENTS  :  Covered dental services often include preventive and  
          diagnostic services, such as cleaning and routine dental exams;  
          basic dental care and procedures, such as fillings and  
          extractions; and major dental care, usually involving root canals  
          and crowns.  Generally, orthodontia, cosmetic services, and  
          implants are excluded from benefits and are considered  
          "non-covered dental services." Cost-sharing for dental benefits is  
          structured similarly to general health benefits, with the amount  
          of deductibles and cost-sharing depending on the type of service.   
          Often basic dental care and procedures have lower deductibles and  
          cost-sharing amounts, while major services, such as crowns and  
          root canals have higher deductibles and out-of-pocket costs.  Many  
          dental plans have an annual cap for covered services, at which  
          point the plan stops contributing to the cost of services until  
          the next enrollment year.  

          According to the author, this bill is intended to prohibit dental  
          benefit plans regulated by DMHC and CDI from setting fees charged  
          by dental practices for procedures that the dental plan does not  
          cover in its scope of benefits.  The author asserts that the  
          policy of dental benefit plans capping fees for procedures they do  
          not cover is an intrusion into the marketplace, and results in the  
          plans dictating fees for services they have no financial stake in,  
          and for which the plan bears no risk.  Furthermore, the author and  
          sponsor state that dentists are not given the opportunity to  
          refuse provisions requiring dentists to adhere to discounted fees  
          for procedures that a dental plan doesn't cover, but must accept  
          them along with the entire contract if they want to participate in  
          the plan's provider network.  The author and sponsor maintain that  
          the capping of fees for non-covered services is used as a  
          marketing tool by plans and insurers with prospective subscribing  
          groups, and has given an advantage to the larger dental benefit  
          companies which have a larger market share and more negotiating  
          power.  The sponsor states that this bill seeks to level the  
          playing field among all dental plans.  
            
          This bill was substantially amended in the Senate and the  
          Assembly-approved version of this bill was deleted.  This bill, as  
          amended in the Senate, is inconsistent with Assembly actions.


           Analysis Prepared by  :    Cassie Rafanan / HEALTH / (916) 319-2097
                                                                 FN: 0006255